Air India is looking at a 30 per cent market share in international operations over the next five years as it taps into new routes, ramps up fleet and brings in a host of changes to its passenger services, its CEO Campbell Wilson said. The airline had earlier announced plans of ramping up domestic market share also to 30 per cent.
The airline will lease five wide-bodied aircraft to its fleet by end-December, primarily to ramp-up international operations. Additionally, trebling of the fleet, across narrow- and wide-bodied aircraft, will happen in a five-year period.
Air India’s current market share in international operations is 12 per cent and the cumulative market share by Indian carriers is not more than 20 per cent. Nearly 80 per cent of the outbound travel is via foreign players. “Clearly there is a lot of capital required and people and training,” he said on Tuesday.
According to Wilson, the company can achieve the target, either organically or inorganically or by a mix of both.
Apart from “diaspora”, demand from the “pure international traveller” will drive new route selection for the company that may “not resume operations” on some commercially unviable international routes, after resumption of flights post-Covid. “The economic landscape has changed. What worked pre-Covid may not work now, and vice versa. The changing structure of the market is more for international consideration,” he said.
In terms of fleet addition, five wide-bodied Boeing and 25 narrow-bodied ones (Airbus) are expected over the next few months. Discussions are also on for taking in more wide-bodied aircraft on lease.
New markets
“In general, Air India’s network has not always been purely commercially driven. And to the extent, it has been driven by the location of the diaspora,” Wilson said.
As the airline improves and brings on board new services and better facilities, the CEO is confident of “appealing to a lot more people than those who have grown up with Air India” and more to other international travellers — “ones that today take Qatar, Emirates or Singapore Airlines”. “That would allow us to broaden the footprint,” he said, without naming the destinations the airline was targeting.
“Flying to where their (diaspora’s) business links are is definitely another (element). And to the extent, we can capture traffic flows with Air India being a completely independent airline from India,” Wilson said.
International hub
Aggregating flights with India serving as an international hub is another segment the airline will tap into. “If you see any of the major carriers like KLM or those from the Gulf, they fly to much more places than their nationals are interested to travel to. They do so because of this aggregation. This is the advantage in India. It has a great geographic location, diaspora to support,” he said.
According to him, India can certainly host more than one hub. While, Delhi and Mumbai are both markets that can support very significant hubs, there is a logic for southern India too, said Wilson. “So, yes, there can and almost certainly will be more than one hub. Exactly where all of those hubs come up, that time will play out,” he added.
Business model
The long-term plan will continue to have two business models — a full service offering and a low cost offering — under one brand. India continues to be a market that prefers a low-cost carrier. However, on the long-haul routes, of four hours and more, the predominance continues to be for full service flights.
Asked on financial turnaround, Wilson said profitability is a consequence of everything else. Improving passenger amenities, in-flight services and bringing down cost of operations (which include on-time performance) and a younger fleet will all ultimately lead to a turnaround.
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